[L]et’s define the term “adverse selection.” Adverse selection is a form of information asymmetry, where sellers and buyers don’t have the same information; for example, a health insurance buyer who knows they need health care, and a health insurance seller who does not know which buyers need health care and which do not. Economics professor Robert Frank explains how an unregulated health insurance market with such asymmetries would play out in the New York Times (2013):

The crux of the matter is what economists call the adverse-selection problem. Uninsured people with pre-existing conditions often face tens or even hundreds of thousands of dollars in out-of-pocket medical costs annually. If insurers charged everyone the same rate, buying coverage would be far more attractive financially for people with chronic illnesses than for healthy people. And as healthy policyholders began dropping out of the insured pool, it would become increasingly composed of sick people, forcing insurers to raise their rates. …. But higher rates make insurance even less attractive for healthy people, causing even more of them to drop out. Before long, coverage would become too expensive for almost everyone.

In other words, a death spiral. ObamaCare’s mandate was supposed to keep enough healthy people in the pool so that the adverse selection problem did not arise[2]. (According to the articles cited in the notes to this Wikipedia article on adverse selection, the evidence for adverse selection in the health insurance market is mixed at best[3]; ironically, therefore, ObamaCare might end up providing that evidence!)

So how’s that working out?

We then proceeded to show how ObamaCare wasn’t working out; the answer to our question was (already) yes.

In the last few days we’ve had strong additional evidence that ObamaCare’s death spiral is accelerating. WaPo:

[Health Insurance behemoth] Aetna said it will exit 11 of the 15 states where it offers coverage through the Affordable Care Act, widely known as Obamacare. That affects about 80 percent of its customers covered through insurance marketplaces.

If insurers continue to lose money, more are likely to withdraw from the marketplaces, a move that would reduce choices for consumers and could contribute to higher premiums. In one county, Aetna’s exit in 2017 could leave no insurers offering policies through its marketplace.

The [insurance company] dropouts also undermine a key promise of the law: multiple insurers would compete for consumers’ business each year, and the power of the market would control costs and raise quality. Instead, the opposite is happening. Rates may jump 24 percent next year, according to ACASignups.net, a website that tracks the law, and a quarter of U.S. counties could have just one insurer on the exchanges, according to Cynthia Cox, a researcher at the Kaiser Family Foundation.

(Just we we urged in “ObamaCare’s Neoliberal Intellectual Foundations Continue to Crumble.”) In this post, I’ll first show that ObamaCare’s death spiral is real. Next, I’ll answer the question “Why now?” by outlining the motives the health insurance companies have to intensify the death spiral in this election cycle. I’ll then take a brief interlude to glance at the death grip that neoliberalism still has on the policy discussion, as the “public option” slithers out from under its rock to become liberal conventional wisdom. Finally, I’ll point to signs that the neoliberal death grip is loosening, with the emergence of what I’ve called “The Overton Prism.” Yes, I know I could get away with a happy dance on having called, in my mild-mannered way, the death spiral correctly, but it’s interesting to see health care policy become dynamic again, in the midst of a Presidential campaign.

The ObamaCare Exchange Death Spiral Is Real

The death spiral is real because we are seeing its properties: A risk pool that’s sicker than expected, policies crapified to keep profits high, followed by the less sick leaving the pool, making it even sicker, rinse and repeat. Robert Laszewski:

The architects of the new health law built into it a three-year program to help cushion early insurance company losses as those previously unable to gain coverage were expected to flood into the program at the start. By year three, they assumed, the risk pool, and the prices the participating insurance companies charged, would begin to stabilize.

But that hasn’t happened. With each successive annual open enrollment the tendency of the sickest to buy coverage while the healthiest hung back has only repeated itself.

Laszewski continues:

The fundamental problem with Obamacare is that the health insurance plans carriers are selling are so unattractive—with their still high premiums even after subsidies, ever larger deductibles and narrower provider networks—that only about 40 percent of the exchange eligible population has signed up. The longstanding insurance industry rule is that 75 percent of the eligible must sign-up to get the enough healthy people in the pool to pay for the sick.

Obamacare has been an utter disaster for the working and middle class that seem willing to buy the unattractive plans only if they are sick and can come out ahead on the deal.

(NC readers already know how crapified the ObamaCare plans are: 2013, 2013, 2014, 2015…) Note that Laszewski’s 40% figure is entirely consistent with NBER Working Paper No. 21565, which concludes, in short form, that for approximately half the “formerly uninsured,” ObamaCare is a losing proposition.

[Aetna] criticized the ACA’s “inadequate” risk-adjustment mechanism, which is meant to limit insurers’ losses as they start covering sicker individuals. …Of Aetna’s exchange membership this year, more than half is new, with those needing expensive care making up ‘an even larger share’ in the second quarter, the company said. Coupled with the risk pool, this makes premiums costlier and “creates significant sustainability concerns,” the company said.

(Of course, in the topsy-turvey world of neoliberalism and for-profit health care, sick people getting care is a problem, but we’ll get to that later.)

A recent report from the Kaiser Family Foundation shows that as many as two states and 650 counties are on track to have just one insurer on the Affordable Care Act exchanges next year. The entire states of Alaska and Alabama will be faced with just one choice in 2017, as well as large swaths of Kentucky, Tennessee, Mississippi, Arizona and Oklahoma.

That’s up significantly from 225 counties with just one marketplace competitor in 2016.

Insurer withdrawals are largely affecting rural areas, Cynthia Cox of the Kaiser Family Foundation said. In fact, 70% of the counties facing a lack of options next year are mostly rural.

The move has patients who get insurance from the public exchange wondering where they’ll turn.

“One of them, I talked to him on the phone today, he’s like, ‘Does this mean I have to move? I have to go to a different county?” said Maria Villalobos, an employee at Sun Life Family Health Center in Casa Grande who is licensed[2] to help people navigate the health insurance marketplace.

So, if you’re in Pima County, you go to Pain City. If you’re not, you go to HappyVille. Yay!

Insurance Companies Triggered the Death Spiral to Muscle the Administration

[Aetna’s exit] also was directly related to a Department of Justice decision to block the insurer’s potentially lucrative merger with Humana, according to a letter from Aetna’s CEO obtained by The Huffington Post.

But just last month, in a letter to the Department of Justice, Aetna CEO Mark Bertolini said the two issues were closely linked. In fact, he made a clear threat: If President Barack Obama&rsquo;s administration refused to allow the merger to proceed, he wrote, Aetna would be in worse financial position and would have to withdraw from most of its Obamacare markets, and quite likely all of them.

Bertolini penned the letter, which The Huffington Post obtained through a Freedom of Information Act request, on July 5 ― 16 days before the Justice Department announced it would fight the Humana deal. The department had asked Aetna how, if at all, a decision on the proposed merger would affect Aetna&rsquo;s willingness to offer insurance through the exchanges.

Bertolini responded bluntly. Aetna supported the law&rsquo;s goal to expand coverage and planned to increase its exchange offerings next year, in the hopes that the exchanges would stabilize as enrollment grew, he wrote.

But if the Justice Department were to block the merger, Bertolini warned, Aetna could no longer sustain the losses from its exchange business, forcing it to sharply change direction

Now that the big health insurers can’t have their tighter oligopoly without a fight from the Justice Department, they’re stabbing competition in the back the other way they can: by exiting the health care exchanges and causing the Obama administration a nasty and very public headache – in the hope of softening it up and getting it to sit down at the merger settlement table.

A new study, published Monday in JAMA Internal Medicine, offers another way of looking at the issue. Low-income people in Arkansas and Kentucky, which expanded Medicaid insurance to everyone below a certain income threshold, appear to be healthier than their peers in Texas, which did not expand.

The study took advantage of what Dr. Benjamin Sommers, an author of the paper and an assistant professor of health policy and economics at Harvard, called “a huge natural experiment.”

In its 2012 ruling, the Supreme Court made the health law’s Medicaid expansion optional for states. The resulting variation in choices makes it much easier to compare what happened in different states and draw conclusions about what effects health insurance coverage might have for the finances and health of Americans.

“Natural experiment.” Really? What’s “natural” about an artifically created market with bizarre and immoral jurisdictional barriers to care?[4]

It is clear, however, that Congress should strengthen the marketplaces to ensure sufficient competition…. Any law as complex and comprehensive as the Affordable Care Act is bound to have some hiccups. The only sensible response to those problems is to improve the law.

“It is clear.” Really? The state of Colorado is holding a referendum on single payer this election year (which Sanders should campaign for. Bernie, are you reading this?) Why isn’t the simple, rugged, and proven single payer system a “sensible response”?

“You have here a situation which all of us who care about the exchanges have to worry about,” said Zeke Emanuel, who served as a top White House health policy adviser during Obama’s first term and is now vice provost for global initiatives at the University of Pennsylvania. “There is a problem with the risk pool. There is a problem with the numbers of people signing up.”

One “solution” to health insurance oliogoplies muscling the administration would be to allow them to merge. A second “solution” is to tinker with the ObamaCare exchanges to make them more profitable. (Of course, once you give in to a blackmailer they muscle you again, but at least this will kick the can down the road.) Modern Health Care outlines the state of play:

With the November elections, approaching, ACA supporters feel a growing sense of urgency to make the exchange markets more financially viable for insurers and affordable for consumers. That’s because many Americans are becoming alarmed about premium hikes insurers are requesting in the individual market and about health plans exiting the exchanges.

Premium hikes being a consequence of the deteriorating risk pool, hence an aspect of the death spiral:

“In the Senate and House races, Republicans will say the ACA isn’t going well, premiums are going up, companies are leaving, and we really need a substitute,” said Robert Blendon, an expert in healthcare politics at Harvard University. “It gets people very nervous.”

And what would that “substitute” be? Why, the “public option,” of course:

ACA supporters say Aetna’s announcement Monday that it will withdraw from 11 of the 15 states where it currently offers exchange plans will give a boost to proposals by President Barack Obama and Democratic presidential candidate Hillary Clinton to establish public option plans. Obama recently proposed creating public plans in areas where competition is limited, while Clinton has laid out a broader proposal to launch government-run plans to compete against private insurers and to encourage states to seek waivers to create such plans. “This should give momentum to the public option,” said Sabrina Corlette, a health policy expert at Georgetown University who co-authored a new report on strategies to stabilize the exchange markets. “If carriers don’t want to play, why should they object to having a fallback public plan?”

The “public option” is always deployed when liberals need to forestall single payer and never in good faith (see here and here); at some point I hope to demolish it once again, but for now let me just say that the career “progressive” public option advocates remind me of Ptolemaic astronomers, desperately adding more complicated and rickety epicyles to an obsolete system, all to “save the phenomena,” and keep alive the idea that the sun revolves round the earth. Because markets.

An Emergent Tripolar Political Structure

Clearly, Aetna’s withdraw, which intensified the ObamaCare death spiral, and spurred liberals to reheat the public option leftovers they stored in their policy fridge, has created a dynamic political situation. The Wall Street Journal summarizes it:

Even [?] on the left, [Aetna’s] move created problems. Sen. Bernie Sanders … promised to introduce legislation creating “Medicare for all” again next year. Mrs. Clinton and Mr. Obama have both backed a public option. Mr. Trump has said he would replace the ACA with a suite of longtime GOP ideas such as allowing health care to be bought across state lines, a proposal that would let insurers avoid the cost of regulations passed by particular states. The downside is that consumers wouldn’t get the benefits of those rules.

So, here we have the emergence of what I’ve been calling “The Overton Prism” (as opposed to the linear Overton Window).[6] Sanders represents the left, Clinton represents the liberals, and Trump represents the conservatives. Both liberals and conservatives are neoliberals, although of different flavors, because markets. The left is not.

Conclusion

The health care policy debate in campaign 2016, has just become very interesting, thanks to Aetna’s withdrawal; it will be interesting to see what Sanders has to say on this topic in his “Our Revolution” rollout later this month. Hopefully, we are seeing a death spiral of neoliberalism itself, instead of merely a death spiral of the ObamaCare marketplace.

About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered.
To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

I left a rather extensive comment (under Links) on the early politics of the public option and the prognosis for ObamaCare based on Aetna’s decision (and base on my own experience working in Healthcare development at Aetna.)

To cut to the chase:
(1) the public option was a failed attempt at introducing a high risk pool (by another name) into ObamaCare.
(2) Aetna, the class of the industry, has just declared ObamaCare dead. Hillary’s “incrementalism” cannot fix it.
(3) The GOP did not kill ObamaCare. Capitalism did.

Lambert has done a superb job documenting how crapified Obamacare policies with high deductibles make no sense for a broad swath of Americans who have no realistic ability to meet their deductibles and copays, even if they get a subsidy on the premium.

I know I’m repeating myself, but this is and always was a matter of letting insurance companies have too much say from the beginning. Even if you believe that mandated purchase of insurance from private companies is the best method of ‘universal health care’, you really do have to have everything in it that Switzerland has, all the things that insurance companies removed because it might limit their profits. Now I thought we ought to look to Canada or in my dreams, France to design our universal care system, but unfortunately both of those come with the idea that health care is a right.

The thing that is most amusing to me, is that the insurance companies should have known this would be the outcome, all the things they threw in because they were so smart are all the reasons this is failing so spectacularly so quickly. Most of what they jettisoned would have mandated they give care, but it also broadened the groups in a manner that was sure to lower premium costs enough that less people would look at the coverage and go it is cheaper for me to just pay cash and even the fine. Don’t get me wrong it was always going to end up too expensive, it is just that they were so busy gaming the system to line their pockets they forgot to look at the possible adverse outcomes they pretty much decided to speed up the process.

Agree, Pat, that Big Health Insurance, along with Big PhRMA and getting ever larger Big Hospital Systems, had waaaay too much influence in writing the whole ObamaCare legislation. And had waaaay too much influence over Obama and the Corporatist Dems.

Struck me that having losses as an excuse to get out of ObamaCare is very likely a plan of the Big Insurers from the git go.

And, the cherry on the top for the Bigs is that the death spiral collapse of ObamaCare will be that it will affect government run actual health care attempts going forward for…how long? Too long.

(Oh, and when will Hillary offer up her Great Compromise to the Repub Congress, which will onclude severely compromising [read “cutting”] Medicare/Medicaid? And, on second thought, since Medicaid has been tied to ObamaCare, who badly will that pogram be affected by the death spiral? Oh, crap and crapification.)

I still have hope that Sanders and his supporters can get it together to take back the Democratic Party, but my hope is, alas, wan….

So, score a big win for the Bigs — but, if the people of this country can figure out how to help themselves, maybe in a decade or so there will be Medicare for All Improved.

Damn the neolibs and economists/pols they rode in.

Any possibility some of the affected states will offer state wide state legislated plans? Yeah, right, I can just see Repub legislators going for that….

Long-term self interest? From big corporations? That concept is quaint and obsolete. The death spiral was a feature, not a bug, and the healthcare denial cartel will squeeze every last subsidized cent out of the dying system, then boom, IBGYBG. The executives will be expat billionaires, the employees and victims will be SOL.

I would just posit that health care and profit are simply incompatible.
Having had very high end health care, it is very easy for the industrial health care complex to test you, retest you, treat you for the injuries caused by excessive testing, not to mention treatments from the pseudo results from spurious test results to simply increase profits. On the other hand, it doesn’t even offer treatments that are far cheaper and oftentimes safer and more effective (heart attack prevention by aspirin instead of branded pharmaceutical products)

If your talking markets, take it where it logically leads:
A reduce costs (i.e., less low profit patients)
B Increase profits (more tests, more drugs prescribed)
C If “health” were actually available economically, most suppliers under a market system would not have an incentive to actually supply it.

for example:http://www.supremepundit.com/2016/07/the-l-e-d-quandary-why-theres-no-such-thing-as-built-to-last-the-new-yorker/
That truism has lately come into question, however, thanks to the widespread adoption of durable, light-emitting-diode light bulbs. L.E.D.s use semiconductor technology to achieve long life spans—bulbs that promise a fifty-thousand-hour design life are not uncommon. Current penetration in the consumer-lamps market (as the bulb business is known) is seven per cent worldwide, and is expected by lighting analysts to reach fifty per cent by around 2022. In the first quarter of 2016, according to the National Electrical Manufacturers Association, L.E.D.-lamp shipments in the U.S. were up three hundred and seventy-five per cent over last year, taking more than a quarter of the market for the first time in history.
This would seem to be a good thing, but building bulbs to last turns out to pose a vexing problem: no one seems to have a sound business model for such a product. And, paradoxically, this is the very problem that the short life span of modern incandescents was meant to solve.

=====================================
The fact is that the market does not provide the best product at the lowest price to consumers. With light bulbs, the problem is minor in the current scheme of things.
The fact that our health “provision” industry is what is being “reformed” and by reformed I mean being subsidized and protected, is simply due to the fact that people with power would be far worse off if it was truly reformed. Doing the most good for the most people is simply not a consideration of health provision “reform” – it can be done, but not without some very high profit industries taking a major hit.

Now, I have no problem with the “market” most of the time – it provides plenty of cars, entertainment, sports, booze, and fantastic porno at reasonable prices. But health care is something it is incapable of providing efficiently or effectively….

I would just posit that health care and profit are simply incompatible.

That could be going overboard a bit, if true it would mean one can’t make a living being a (real) doctor. Looking back in history (and other cultures), that doesn’t seem to be that case… although it could look like that in an economy where a vast percentage is scraping by at marginal hand-to-mouth or paycheck-to-paycheck wages. When patients can’t afford anything beyond non-emergency essentials (if that), a health service provider can’t even expect to cover operational costs (for services to that sector).

But would suggest that insurance makes no sense for health, especially if the insurance model is for-profit, and markups on end-market products are high (and multiple).

There are plenty of doctors and other healthcare professionals working for non-profits and making a decent salary. I think a lot of the discussion in the USA is about political “branding”: instead of saying “socialized medicine” try saying “non-profit medicine” and then see how much further the discussion goes.

But here is a simple truth that many of us seem to resist: living too long is also a loss. It renders many of us, if not disabled, then faltering and declining, a state that may not be worse than death but is nonetheless deprived. It robs us of our creativity and ability to contribute to work, society, the world. It transforms how people experience us, relate to us, and, most important, remember us. We are no longer remembered as vibrant and engaged but as feeble, ineffectual, even pathetic. …

I think this manic desperation to endlessly extend life is misguided and potentially destructive. For many reasons, 75 is a pretty good age to aim to stop.

“It is difficult, if not impossible, to generate new, creative thoughts, because we don’t develop a new set of neural connections that can supersede the existing network.”

1) He’s no neurologist.

2) He’s peddling the kind of faux contrarian, glib, “Freakonomics” BS that the editors of The Atlantic adore. They give masses of page space to this kind of crypto-Darwinian rot………. because it’s a great way of keeping their immediate subordinates a few rungs down on the social ladder. Nothing is more effective in cutting middle-aged strivers out of the winners’ circle than asserting they are karmically destined to be has-beens. Repeatedly. In every available venue.

This sort of coarse, obvious manipulation works well on already depressed 50- and 60-somethings. It’s much less effective in hobbling prime aged adults. From what I see — demographically — their rising desire to ‘have a life’ is becoming a problem for his set.

From Allan above
“But here is a simple truth that many of us seem to resist: living too long is also a loss. It renders many of us, if not disabled, then faltering and declining, a state that may not be worse than death but is nonetheless deprived. It robs us of our creativity and ability to contribute to work, society, the world. It transforms how people experience us, relate to us, and, most important, remember us. We are no longer remembered as vibrant and engaged but as feeble, ineffectual, even pathetic. …”
I would change the first phrase as follows
But here is a simple truth that many of us seem to resist: Supporting the corrupt FIRE sector to long is a loss…………………………………….

Look I get that they miscalculated, but part of the reason this industry was willing to even consider not tanking reform was that they were facing an ever shrinking market as businesses were dropping employee insurance coverage at a rapid rate.. Obama are goes under and the employer mandate disappears. And that is it for them.

Much as the political class is wary of health reform, these moves could easily bring about single payer faster.

The health care system must be concerned with both prevention and education. My husband recently suffered a heart attack. He had bypass surgery and left the hospital for home in seven days. A doctor set up inter-mural care for changing his bandages until there was no fear of infection. At six weeks after returning home, my husband is going to have a teleconference with his cardiac doctor (who is in another city) regarding his healing process. In the meantime, my husband attends a two-hour course twice a week for a total of eight sessions that help him to live with his new cardiac disease: the information covers his new cardiac medications and how they work; the effects of salt and how to avoid buying foods with too much salt and sugar; how to deal with depression, and so on. The educational component of his treatment is just as important as the initial surgery which saved his life.

And the happy thought: no insurance company was involved in any of these activities.

I am glad for you and he that he survived his first encounter, but please have a look at Esselstyn’s* Prevent and Reverse Heart Disease: The Revolutionary, Scientifically Proven, Nutrition-Based Cure or John McDougall’s The Starch Solution, because the pills and salt/sugar recs are forms of disease rather than health care. Because heart disease is wholly reversible in pretty much all cases (but doctors both don’t know — they receive about 3 hours of nutrition training, and big pharma certainly won’t be sponsoring lectures on it — and are worried about their bottom line, because — respectfully — where would their jobs be if there was no more demand for bypasses, and insert stents, all day every day? Note that CVD-related surgery is the primary source of income in most hospitals.)

“In the meantime, my husband attends a two-hour course twice a week for a total of eight sessions that help him to live with his new cardiac disease: the information covers his new cardiac medications and how they work; the effects of salt and how to avoid buying foods with too much salt and sugar; how to deal with depression, and so on. The educational component of his treatment is just as important as the initial surgery which saved his life.”

Likely the educational component of your husband’s treatment is helpful in his case. My father had quadruple bypass surgery at Yale 17 years ago. He was offered similar educational opportunities at that time. His view was that he was capable of reading on his own (and he has), and that he had already spent quite enough time in the medical system and around medical helpers, so he skipped all of that, and skipped the cardiac rehab (he did it on his own after reading about it). Not everyone wants all that stuff; not everyone needs all that stuff; some find it just appalling. So I can’t accept the notion that the educational component is just as important as the surgery itself. The surgery is crucial; the “education” can be optional.

“This bill was written in a tortured way to make sure CBO did not score the mandate as taxes,” Gruber tells the audience with a smile. “If CBO scores the mandate as taxes, the bill dies.” After the cheerful admission of deceiving Congress’ own fiscal watchdog, Gruber then offers his dismissive take about the saps who bought the arguments. “Lack of transparency is a huge political advantage,” he argued. “Call it the stupidity of the American voter or whatever, but basically that was really, really critical for the thing to pass.” Gruber added that he didn’t care about lies being told — as long as the bill passed.

This touched off a firestorm of criticism, and even Gruber seemed momentarily chastened. By Tuesday, he appeared on MSNBC to retreat from his gloating over snookering voters. “I was speaking off the cuff” at an academic conference, Gruber explained to Ronan Farrow. “I basically spoke inappropriately, and I regret having made those comments.”

That may have disarmed the story — except that the next day, two more videos emerged of Gruber bragging about misleading and exploiting American voters with Obamacare.

In the second video, Gruber tells a different conference audience that the so-called “Cadillac tax” on high-end insurance plans was in effect a tax on policyholders rather than the insurance companies, but that “the American people are too stupid to understand the difference.”

Related: The Obamacare ‘Shotgun Wedding’—Marry or Lose Your Home

In the third video, taken from a speech at the University of Rhode Island in November 2012, Gruber bragged about how the Cadillac tax structure exploited voters’ lack of economic education. “It’s a very clever, you know, basic exploitation of the lack of economic understanding of the American voter,” Gruber gloated.

“Repeal it” is a better answer. Even if there is no “pass something new”.

If there are huge health riots all over America, perhaps the problems will be addressed. Perhaps if the Physicians for National Health Care bring loaded openly carried guns to Congressional Hearings, they won’t be arrested and silenced.

Of course. A more honest title for the ACA would have been the Medical Divide & Rule Act. The primary purpose was always to forestall anything better, while enabling rentier behaviour. Try telling that to the average tribal “liberal” though (I did, repeatedly).

very good article and analysis. It would be nice if the Obamacare cheerleaders at the NYT would read this and realize what is really going on. I am so sick of reading years of pro ACA propaganda, and I am embarrassed to admit I was in favor of healthcare reform. I should have known better. In any case you are so right to point out that this is just another idiotic idea brought to us under neoliberal orthodoxy. And don’t get me started on my electric bill and the choices I have to shop for electricity . There appears to be some legitimate choice under that scheme but it is also a nightmare of bait and switch pricing that forces you to monitor your bills and change suppliers regularly. More neoliberal economic idiocy.

It wasn’t necessarily idiotic FOR OBAMA. It was designed to earn him hundreds of millions of personal dollars of personal payoffs from Big Insura after he left office. That was Obama’s personal goal here.

“Both liberals and conservative are neo-liberals though of different flavors, because markets.” The left is not.”

An alternative way of conceptualizing this issue is that neo-liberals (both conservative and liberal) as well as the modern left are largely in the same political camp because all three groupings support a powerful state to implement their respective political/economic visions of, in this case, health care.

Mirowski has persuasively argued.that neoliberal doctrine is not deeply opposed to state interventionist theories. He goes on to maintain that from the 1940s onward neoliberal doctrine embraced the project of retasking the strong state to impose their particular market vision of society.

A key future question for the left if whether they are willing to sufficiently democratize the modern State so as to institutionally support genuine popular control of power, the instruments of coercion and the behavior of public officials so as to not repeat the increasingly anti-democratic nature of modern political movements run by primarily upper-middle class professionals for their own interests– but always under the ideological guise of helping the poor and the working class.

Just want to say, Lambert, that while I don’t always agree with your positions, you’re always interesting to read, and this was no exception. Your documenting of Obamacare has been spot on since the beginning. Congratulations on being right about an absolutely disaster, what are you going to do now? Disney world? :P

I looked into this ProgressNow group and it was founded by Wes Boyd of MoveOn.org. A google search lists it as an “Affordable Care Act Advocacy Group”.

It’s infuriating when people (progressives is no longer a meaningful descriptor) defend Obamacare with its myriad flaws rather than admit that a mandate to purchase private, for-profit insurance did not result in quality, affordable health care for all. Jeez. Sorry always seems to be the hardest word.

The crushing of the Sanders faction does not bode well for Amendment 69 because it’s likely to supress turnout among natural allies (Sanders has been AWOL on the issue for awhile, btw). I’ll keep advocating in my own way, of course, but in a criminogenic environment such as this, where are the friendlies?

My apologies, AZ Slim. That sounded worse than I intended. With Clinton as the nominee (and not knowing yet what Sanders will propose next week in his scheduled address) my concern is that those who’ve decided not to vote the top (or down-ticket) candidates will need to find extra motivation to vote for a ballot issue like Amendment 69 this November. It doesn’t help that local Democrats seem determined to shut down a Democrat-proposed (Senator Irene Aguilar) initiative.

If Sanders still supports Colorado Care, I look forward to him re-endorsing it soon and loudly…

The Republicans will never come up with a viable alternative–maybe I shouldn’t say never but it certainly seems unlikely–because any realistic plan to provide universal access to healthcare or universal insurance coverage requires some degree of government intervention–the free market won’t do it by itself, for reasons that should be fairly obvious.

Ultimately, I’m convinced what’s stopping the United States from joining the rest of the developed world and having some level of access to healthcare is not insurance companies but rather a widespread fear; however, irrational it may be, that somebody somewhere is getting something for nothing. As long as critical mass of people believe those without access to healthcare are merely freeloaders looking for a handout–as nonsensical a belief as it may be–the United States will remain the only developed country to not guarantee a basic level of healthcare access or insurance coverage.

Exactly this. I see it on my Facebook feed day after day. A bunch of mostly republican and libertarian memes about evil poor people making life worse for them. Also boot straps of course. Never considering there aren’t enough good jobs to go around. My husband and I have excellent education and crap jobs that don’t match our education. Also no basket weaving for us. I have an engineering degree and my husband has a completely useless Juris Doctorate from a second tier law school. I am grateful every day for snap benefits, WIC and Medicaid coverage for our kids.

Totally. I hear this All. The. Time. and not just from rightwing/republican voters, but from friends and acquaintances who claim to be liberal/lefty. Oh my aching back but do Americans love to vetch and whine about all those lucky ducky poor people who are MASSIVELY ripping off the system, are lazy MoFos, who want something for nothing. And THEY get all this free “good stuff” that us hard working citizens are totally deprived of.

Most citizens have drunk the rightwing propaganda Kool Aid, and they truly believe that there’s this humongous cohort of poorz (typically the blahs) who are lazy, shiftless, worthless people who are somehow, against all odds, making out like bandits.

Reason and logic, much less facts, need not apply.

That’s, in part, how we ended up with ACA. Because it “soothed” citizens into believing that, at least the shiftless poorz weren’t ripping them off. Hey: let’s all get ripped off by mega-rich white guy BigIns, BigPharma, BigHospital, BigMedical CEOs!!!!! Because that’s “better” than getting ripped off by poorz.

Thank you so much for sharing your view that even though you personally have benefited from ObamaCare, all should not have the same opportunity. Your comment is an important object lesson for all of us.

I don’t think anyone has said that no one has benefited – we all know that some have. But many have bright, shiny insurance policies that, between the premiums, co-pays, deductibles and balance billing, mean they really can only afford the insurance, and not the actual care they need. Add into that mix the often limited provider pools and access isn’t even what it was supposed to be.

We all have stories. My daughter and her husband both work for small companies that don’t offer group coverage. They had individual coverage prior to the ACA, but CareFirst declined to continue to offer that policy, so they replaced it with something similar, but more expensive. At the end of the first year, they were told their premiums were going up to over $1,000/month. They do not qualify for subsidies. Long story short, they found new coverage for less, but the deductibles are higher. I’ll leave out the part where their premiums got lost, one policy was suddenly not going to be available, and another didn’t include their doctors as they had been told.

My husband’s brother’s wife died last year, almost certainly as a result of CareFirst of Idaho’s refusal to cover a course of treatment for a chronic condition that CareFirst managed well when they lived in Colorado. By the time she got the treatment she needed, it was too late. She suffered, her family suffers still, because some twit in an insurance company thought he knew better than the doctors who treated her in Colorado, and the ones trying desperately to treat her in Idaho. Had my brother-in-law had unlimited resources, he could have told CareFirst to go fuck themselves, but he didn’t.

So, I hope you will take this in the spirit in which your own comment was delivered, but “I’ve got mine, so go fuck yourself,” actually seems more fitting coming from an insurance company than someone whose fellow travelers are, in many places and in many ways, not benefiting from the ACA at all.

Happy it’s all working so well for you; hope you never have to experience what it’s like to have your only hope for reasonably good physical, mental and financial health die because an insurance company decides you really don’t matter enough.

Thanks for sharing, Jack. Follow me closely here. It’s possible for the death spiral to be real and for Aetna to use it as a reason to muscle the administration. See how easy? You don’t really have to try very hard at all.

How about allowing Aetna to merge with Humana and whoever else they’d like to merge with. Once we have one huge health insurance behemoth, bust out some of those anti-trust laws that are sitting around getting dusty, nationalize the whole thing and voila! – single payer.

I have a crazy idea I’ll toss out. Medical doctors (and dentists) have very strong labor unions — guilds actually. As the cost for medical care skyrockets, especially specialist care, the golden hallow of honor and respect doctors enjoy grows dim — even tarnished. If someone with deep pockets at the state level — like the big hospital chains — pushed hard to change licensing laws to make it easier for foreign medical doctors to obtain license to practice — and if states passed laws enabling more freedom to practice to nurse practitioners and pharmacists … who would cry in sympathy with the poor AMA and ADA and all the poor deserving medical doctors and dentists?

Medical school has become so very expensive and grows more expensive. How many young doctors will be able to start into private practice? — especially if large banks cut back on the loans the new doctors will need to open a practice. And what if the number of independent practices where young doctors might once have started out is reduced and bought up by big hospital chains?

It starts to look like a move to capture the medical profession and set them into corporate offices — just another hired gun to cover with corporate overheads. As the consolidation of the Medical Industrial Complex continues the medical profession could be one of the casualties. Nurses are already captive employees.

The Medical Industry could position itself to extract phenomenal monopoly rents. By controlling standards of practice for doctors they could eliminate attempts to substitute less expensive cures. Once the TPP, TTIP and TISA pass the Medical Industry would benefit from the decline in pollution controls and work-place safety regulations.

Paranoid delusions? As things have evolved and the direction for the future becomes more clear perhaps not. I’m not affiliated with the medical profession in any way — which disclaimer is made to beg forbearance of my ignorance. I have a deeply troubling feeling — an intuition of sorts — that much more is going on than just the motions I watch the right hand making. What is the left hand doing?

Your premise is incorrect. Doctors are being squeezed by insures to the degree that many are leaving the field or turning themselves into “concierge” practices or practices that don’t treat medical conditions, but primarily or entirely engage in cosmetic or anti-aging services. You pretty much can’t find a primary physician in many areas of the US. They can’t make a go between all the costs of fighting with the insurance cos (who are also slow payers) and malpractice insurance and the overheads.

[“Your comment is awaiting moderation.” — I received this message twice now but cannot fathom why. I’ll try typing the comment in instead of cut and paste from my editor — maybe some crazy character in the file?]
I have a crazy idea I’ll toss out. Medical doctors and dentists have strong labor unions guilds actually. As the cost for medical care skyrockets especially specialist care the hallow of honor and respect doctors enjoy grows dim even tarnished. If someone with deep pockets like big hospital chains pushed hard to change licensing laws to make it easier for foreign medical doctors to obtain license to practice and if states passed laws enabling more freedom to practice to nurse practitioners and pharmacists who would cry in sympathy with the poor AMA and ADA and all the poor deserving medical doctors and dentists?

but for now let me just say that the career “progressive” public option advocates remind me of Ptolemaic astronomers, desperately adding more complicated and rickety epicyles to an obsolete system, all to “save the phenomena,” and keep alive the idea that the sun revolves round the earth. Because markets.

this is a wonderful metaphor of the OCA and more and more of our corporate political economic system, fighting to hang on but losing its grip.

Thank you for your passionate work on this argument, Lambert.
I would be happy to see the end of Neoliberalism and the adoption of Medicare for all. None the less, it seems in light of her coronation that HRC’s “fix” for this in to have 55+ buy into Medicare, since that is the group which is costing the insurance companies too much money. While this Congress would say no to Obama, the next Congress-presumably in Republican control-will be faced with a rural constituency that will demand subsidized health care.
I agree that the actuarial minded elite would rather let the poor die. However I think that the new Congress will exhibit enough Christian compassion for their own communities to accept an expansion of Medicare even if it required expanding the budget deficit.

With, of course, the usual the usual complex eligibility system to separate the deserving from the undeserving. I mean, it can’t possibly be as simple as an age cut-off, right?

Heck, why not go with Teddy Kennedy’s idea, before he lost his mind and bought into Obama, to progressively lower Medicare eligibility age until all were covered? IIRC, the idea was to lower it five years every year. (Not to say that Medicare doesn’t have its own issues with neoliberal infestatation but at least that would be a substantial improvement.)

Live buy lawerly parsing, die by delaying care due to fear of a $6000 deductible. I dunno. I approve of friction-less transactions, but the neo-liberal edifice has to keep the lights on. I can’t expect HRC to abandon incrementalism for dissolution of the third way. Although, FIRE sector workers holding tin cups on the corner holds a bit amusement.

Does anyone here have any links to what “Medicare for All” would look like?

I’m on Medicare now as a result of being on disability. You automatically get it after two years, but it’s not all free. You get catastrophic coverage — “Part C” — which is of course a big relief, and it fulfills the ACA requirement to have insurance. However, if you want to see your doctor for preventive or acute care, you need “Part B,” and unless you sign a form to opt out within a short window of time, they start deducting premiums from your monthly disability check.

Like many here, I had a worthless ACA plan. I signed up for the cheapest available, which covered nothing. Essentially, I was paying a $12/mo tax to avoid paying an even higher penalty. Considering the horror stories of many NC commenters, I got off ridiculously easy. So now, I’ve got catastrophic coverage through Medicare, but if I want Part B, it’s $104/month. As it is, a full 75 percent of my disability check goes toward rent. I make a little extra through a home business, but there is absolutely nothing left at the end of the month to save. Forget about retirement. My “consolation” is that no one in my family has lived past 66.

I am fortunate in that, as a veteran, I get to use the VA health system for free. It’s a 4-5 hour round trip for me to get to the nearest VA medical center, and the system has its issues. Overall, though, my experience has been acceptable and in a few instances surprisingly good. But if I didn’t have it, Medicare Part B would not be within my reach. I’d have to take my chances and pay out of pocket or just not go to the doctor, which is more likely.

So when I hear “Medicare for All,” I don’t make any assumptions about what that means. Apologies if this has been discussed previously.

HR 676 – Expanded and Improved Medicare for All is the long-standing House bill that is usually the reference point when people talk about Medicare for All. This is a link to a one-page summary, which also contains a link to the text of the bill.

It’s comprehensive care, including things like dental and vision, and there are no out-of-pocket premiums, deductibles, or co-pays. The bill includes suggested funding.

I know I’m truly grateful for aca because when the demodogs controlled both houses and potus, hell we might have been stuck with Media-Care for all and who in their right mind would want free health care;)

ACA is the Hurry up a die already you’re cutting into corp. welfare/health care profits.

Gee. What’s the compensation level for top executives at those insurance swindle places? They lose money not because payout is greater than revenue coming in. Rather it’s due to exceedingly excessive compensation paid to high level exes.

I thought one of the touted benefits of ACA was it was supposed to bend the insurance cost curve for everyone. My very large, state wide group health insurance policy premiums are going up 30% next year – again; the deductable is going up; and the Pharma costs are going way up, more out of pocket expense. Not nearly as much as in individual plans, I know. But a 30% hike on a population whose general group health profile hasn’t changed? The people who signed up for the High Deductable Plan/health savings account a few years ago on the promise that it would save hundreds of dollars yearly in premium costs are going to be paying roughly the same premiums as the people who stayed on the traditional plans. (And once they switched out of the traditional plan to the High Deductable Plan they are barred from switching back to a traditional plan.) That’s some cost curve bending there.

My crazy Grandmother avoided doctors like the plague. She only went to her homeopath. She and my grand dad lived to 98 years and 97 years.

Their daughter, my Mother, was a doctor (GP). She followed her own advice, and consequently died like a dog. She never hesitated to take antibiotics, hormone replacement therapy etc. Being a doctor (insider), she got the most up to date care during her demise. She was only 71 years old. That was years ago and it still breaks my heart. She would still be alive (IMO) if she had avoided medicine (as a profession) and been a Natural Health person, like her mom.

Medical care here in NZ is inexpensive/free and good. Yet I avoid it, except for injuries. The docs want to put us all on statins!

Cat shit, whether free or sold by the gram (expensive), is still cat shit.

Clarky, we’re in NZ this week. It took me about 5 minutes or so to convince our Airbnb host how crazy and ridiculous the US healthcare system is. She erupted, “how do you stand to live there?” And that was before I started telling her about balance billing and other predatory practices…
Be grateful for what you have, even if you don’t need it now.

I am grateful, Carl. BUT, if the TPP (NZ is a “partner”) gets pushed through, I believe our NZ socialist medical system is doomed. Big Pharma is already doing big media pushes for drugs like Keytruda, which costs $150,000 per year and are showing only “promising results” in cancer patients.

Goodbye to simple public health measures, as funding gets soaked up paying for expensive “wonder cures” that extend lives of a few, by months (NOT, saves lives of many, like old fashioned Public Health does).

Public Health is relatively inexpensive- good food, water, air, plenty of exercise, laughter and friends. When I was growing up, there was only one fat boy in my class (35 kids). Now he would be “normal sized”. This is not a pharmaceuticals deficiency, it is a public Health deficiency.

I am pro Donald Trump because (but not only because) I want my grandchildren (all NZ grandchildren) to have access to good public healthcare into the future.

Our good health is our precious possession. There are many promises made about “the journey to good health”. IMO, most of what we are told is wrong, so we become unwell. The doctors, drug companies, health food stores do not seem know. (I don’t think they want to know. There is plenty of money to be made taking care of chronically ill people, especially rich ones) People get enraged by their frustration and fear.

Steven Jobs was a billionaire and he died in his 50s in spite of limitless resources..

To be fair, though, he chose not to use those limitless resources to access the kind of medical care you are scorning, in favor of something your grandmother would probably have approved of, which is why he died when he did.

I agree that there are all sorts of problems with American medical practice, but Jobs isn’t a good data point for your general argument.

I want to get my two cents in as far as predicting the future. Because I also see the “exchanges” as a way for employers to dump providing health care to employees. An employer can say “I can’t afford employee health insurance no more”. What he could do is then provide a flat sum to employees with the purpose of purchasing insurance. Whereas before he was paying $600 per employee per month for insurance, now he can spend $250 a month in a stipend and does not have to face all the HR time as well as dealing with 20% yearly price increases. Not his problem anymore. It’s the citizen/consumer’s problem to deal with. And of course, this is a household expense increase that gets swept under the public rug (this is what I refer to the household having to take on more costs of something, but it’s praised as making things better for the side that doesn’t have to pay). Another example is pensions. Employers used to contribute far more than 3% of an employees wages to investments, employers had to hold the investment company responsible for being able to pay out at the end. 401k pass all of that onto employees. And we all celebrate how great 401ks are, how employers can’t afford debunked benefit plans anymore. Yet I am still waiting for an example of someone who has retired and is living off all his/her 401k that they saved for (no inheritances, or lottery winnings, strictly living off the 401k.). And not someone who made $600,000 a year. I want to see someone who made $12 an hour working at the local oil change, grocery store, whatever other minimum wage job out there. In other words, hard working blue collar Americans that have given up their defined benefit plans in exchange for simple plans.

First of all, thank you Lambert! You’ve had the best calibrated BS detector on this topic for years! Our family had the opportunity to live in British Columbia a few years back. The BC health care system was “fine”. Not perfect, but gosh the medical transactions were a piece of cake. I couldn’t stop myself from going to the counter after I was done with an exam or a treatment to make sure I didn’t need to sign something or fill out of form. I never did. I heard the Canadian beefs, and some are justifiable–and some are due to limitations in the Canadian law. If “health care” is a right, then it ought to include dental and eyewear care, period. And yes, a pack of Rothman cigarettes was like $10C on Vancouver Island, a few years back and a 6-pack of Molson’s was about the same. That’s (in part) how they pay for health care in Canada. I’m not sure how that will translate to my $18 Yuengling cases of beer, or my $6.30 American Spirit Blues. (I know). The Canadian system took decades to develop, Province by Province, which is why I wish Bernie would play a larger role in the Colorado election. However, the Single Payer initiative in Vermont fizzled, so there may be reasons for Bernie’s reticence that I don’t know.

I agree that Jessica raises an interesting point. I love NC for the comments, Lambert’s post was great, and we had at least 3 trolls here. I lost a brother 2 years ago–no health insurance, could have been cured; we can’t afford it ourselves. All of us college educated; I’ve got a M.A; we just can’t afford it and pay our rent and bills.

The idea that health coverage should be a “right” is the proper idea to promulgate, IMO. $10 six packs to help pay for it should calm down the creepers complaining about the “undeserving poor”. Thanks again Yves and Lambert for all you so.

There is an argument that a “socialized” government-run system would fail because government is too big and wasteful. While government is indeed bloated, there is at least some accountability and recourse for voters. A profit-driven privately run system might operate well if there were indeed competition, which there is not. Also, with a privately run system the customer/patient has nowhere to turn if they are getting shafted. With Obamacare, patients are getting shafted by the insurance companies and government.